I think you should all stop knocking Greg (ie.GBB) and start getting a bit real. Seems to me that he's right about a whole lot of things, but maybe wrong about some too (but who is perfect?). In te final analysis he's a business man. Business people take care of business so doubtless GBB too is taking care of his business. I may not agree with
everything he writes but he's clearly nobody's fool and he, like me, is entitled to his say.
Question is why he spends so much time on Hot Copper. I'll try to deduce what they could be further down this post (deductive and inductive reasoning --- they used to teach that where I went to school, sadly no more it sems!). Of course I may well be totally wrong, though as my reasoning can only extrapolate on the basis of what I know and/or can find out. It may just be that there ain't too much to do for amusement in sunny Nuuk/Narsaq in the evenings
(except drink perhaps and being nobody's fool, I'd imagine he limits that passtime?)!
What he's right about:- Greenland Minerals Ltd. (ie.GGG) has somehow got itself into a real mess. If this were not so they wouldn't be facing a ban right about now would they?
- Evidently they have not thus far succeeded in winning over and convincing the locals nor the Greenlanders at large which, of course, is why they've run into such stiff opposition (that must be obvious to any impartial observer).
- Those who post here (or most of us at least) are shareholders as GBB still is too. We therefore are collectively "co-owners" of this business. Moreover the largest single shareholder holds less than 10% of the shares on issue. The owners (ie.us) collectively elect a board of directors to manage the business on their behalf. This separation of ownership and management and concomittant public disclosure requirements are in the nature of a "limited liability companies" sometimes also known as "public companies" GBB's business Tanbreez Pty.Ltd., on the other hand, is a "proprietary company" (ie.Pty) It too has "limited liability" (ie.Ltd). Proprietary companies are not obliged to make much information public. However, nor can they raise capital by selling ownership interests (ie.shares & options) on (public) share markets. Ownership of shares in proprietary companies is thus effectively "by invitation only". As shareholders (ie.co-owners) of GGG we collectively and individually have the right to demand an account and answers to any concerns we may have from the business' managers we appoint. If a majority of us (on the basis of one vote one share (in the absence of any "Preference Shares" in the company structure) are not satisfied with their performance or for any other reason we can table, move to, and vote on motions to replace any (or all) of them.
- I do not believe Greg is right that GGG has totally waived its right to sue (its rather more nuanced than that), but do 100% agree that to do so would be in nobody's interest. Consider these things: if GGG won massive damages against the GoG (which may well be possible ---- see one of my previous posts), would the GoG (which is ---- ummmm ---- "struggling" financially) actually have the capacity to pay those damages? And if they didn't pay the damages, what other redress could GGG reallistically expect to receive? Also GGG, an Australian company (Ozzie Ozzie Ozzie Oi Oi Oi
!!!) is looking to operate a mine in an isolated autonomous region of foreign country populated largely by indigenes for the next 37 years at least. Can GGG afford to get its predominantly Inuit hosts off side? Even if GGG could force the GoG's hand and get their exploitation permit, how smoothly do you think things would go --- for 37 years --- if they kich things off by being at loggerheads with their hosts?
Greg is not managing GGG (though just perhaps he should be?). The fact that GGG is in this mess must come down to its managers. As a shareholder I thus offer (gratis) some pieces of constructive advice on how to start resolve this mess (that's what you'd prefer to hear too isn't it GBB?).
First off the current managers perhaps need to do some intensive Strategic Planning to determine whence from here. I'm retired now, but when I was in the Business Analysis/Business Consulting game (never for GGG), there was a tried tested and true technique we used called "SWOT Analysis". SWOT stands for
Strengths
Weaknesses
Opportunities
Threats
Make an exhaustive list. Start with bullet points then drill down into each. Think logically. All ideas are good and all participants equal. Filtering comes as you start to drill down into each bullet point remembering that its an iterative process. Like "
how can we best harness each of our strengths" "
how can we best mitigate each of our weaknesses" "
how can we best exploit each of the opportunities we have identified" "
how can we best protect ourselves against each of the threats we have identified"
Sounds simple, but it is in fact an in depth and exhausting process. Prerequisite is that participants remain humble putting their egos and private agendas completely aside for a few days to concentrate on defining things clearly and unambiguously. A colleague once commented that Management Consulting is a bit like being paid by somebody to read their own watch for them. Its strange but true that managers often get so close to the businesses they manage that they can no longer see what is obvious to an outsider. ie. They get to the point that they literally can no longer see the wood for the trees thus failing to see their own mistakes.
Anyway, talking of opportunities, I float this past you (I'd reckon this idea in one form or another has already occurred to GBB too ---- but I also want my bite at the profit and not to be bought out for crumbs --- Greg!):
Instead of GGGites slagging off Tanbreezites (and vice versa), perhaps the 2 organisations could collaborate. Here are 2 REE deposits within the same jurisdiction that are but a handful of kilometres from of each other. One has an exploitation permit. The other is larger and potentially more lucrative and has satisfied all the requirements set out at the time of the exploration permit for an eventual exploitation permit, but has as yet not recieved one. Both projects need to raise capital in the vicinity of 500 million each to progress. One has access to public share markets to raise capital, the other does not.
If Greenland Minerals and Tanbreez were somehow combined into one project, it seems to me the total capital requirement would have to fall significantly as they could share facilites and costly mining equipment. One port instead of 2, one plant instead of 2, 1 tailings facility instead of 2, 1 administration instead of 2, one REE provider instead of 2 fighting over (some of) the same customers. The list of potential benefits could go on and on. Furthermore, initially the combined entity could concentrate on the REE deposit with an exploitation permit deferring the project without one to a later date (subject also to further work perhaps?). The direction of the combined enterprise would be determined by each player's voting rights. In a new combined entity these could be ring fenced by adopting a capital strusture that includes Preference Shares and pegging.
I would humby suggest that the locals should be included in the management structure at a senior level. If the GoG was assigned 20 to 25% of the shares (or perhaps part to the GoG, the other part to the community of Narsaq?) and guaranteed that their free carried participation would always be pegged in any future share issues, and further that these shares were Preference Shares with voting rights at, let's say, 2 for 1 versus ordinary shares, the people of Narsaq and Greenland at large would then have a say in the running of the company and participate in its profitability in addition to receiving royalties.
Another potential advantage would be the dilution of Shenghe's holding as at present Shenghe is both a strength (their expertise) and opportunity (market potential) and, thanks to international politics (over which GGG nor Tanbreez have any control), a weakness and a threat. I personally have nothing against Shenghe, the CPP or the Chinese people in general. Indeed I tip my hat to what they have been able to achieve in so few years. I'd prefer them as freinds than enemies. But one must recognise the direction the breeze is blowing at the moment.
Sorry if I've offended or bored anybody.
(20min delay)